[CazuaLLUK]

So,

I have 42 months left of my PCP, £288 a month with a GFV of £9270.

Ever since adding new wheels to my car, modding it a bit I am really tempted to keep it. I love the car.

My Finance settlement is: £16,500. My total finance inc PCP/bubble etc is £21500 in total roughly.

I can take out a loan on 3.5% APR for £16,000 and clear my finance, leaving me £18,000'ish to pay on a loan. Doing it like this would save me £3500 in interest. And the loan monthly is roughly £300 so only £12 more than my PCP monthly.

Whats your guys thoughts on this? If I am 100% wanting to keep the car surely its best to do this asap to save on interest.

Plus if I want to move to another car in future, just sell privately to cover the loan repayment and save money on the side for a deposit etc. Thanks for any advice in advance.

Liam

[Lewis Mc]

Have you actually been quoted/approved for the 3.5%? as you won't always be offered the advertised rate.
Last year i went to get a 5k loan at 3 or so % but got offered 9% once a soft check had been done.

[CazuaLLUK]

Originally Posted by Lewis Mc

Have you actually been quoted/approved for the 3.5%? as you won't always be offered the advertised rate.
Last year i went to get a 5k loan at 3 or so % but got offered 9% once a soft check had been done.

Took a loan out with nationwide 6-7 years ago, and got the advertised rate of 3.8% - Phoned them today, they said no reason why not.

I am just thinking things over, after a year of paying the loan I would be down to £14,400 left owed. 1 year more on the PCP and the car is likely to be valued around £15,000 or a little bit yes.

All comes down to if I am 100% wanting to keep the car, and ever since making changes etc. I have not once thought about handing it back/upgrading as I am moving house next year and upgrading/handing back will likely mean my monthly will go up. Tempted to sit on this car for a while.

Be good to hear you guys thoughts.

[ukbeemerboy]

Originally Posted by CazuaLLUK

Took a loan out with nationwide 6-7 years ago, and got the advertised rate of 3.8% - Phoned them today, they said no reason why not.

I am just thinking things over, after a year of paying the loan I would be down to £14,400 left owed. 1 year more on the PCP and the car is likely to be valued around £15,000 or a little bit yes.

All comes down to if I am 100% wanting to keep the car, and ever since making changes etc. I have not once thought about handing it back/upgrading as I am moving house next year and upgrading/handing back will likely mean my monthly will go up. Tempted to sit on this car for a while.

Be good to hear you guys thoughts.

After 3 and a half years, you won't want to keep it. You'll want the next newer model which will make your current car look dated by comparison. Harsh, but true I'm afraid

[davenice]

What's the APR on your PCP? Will taking out the new loan affect your ability to mortgage/remortgage next year? Thinking credit file etc...

[CazuaLLUK]

Originally Posted by davenice

What's the APR on your PCP? Will taking out the new loan affect your ability to mortgage/remortgage next year? Thinking credit file etc...

My current PCP does not show on my Experian report, nothing at all. It's not uncommon they said for this to be the case. Also regarding my current PCP it 'would' show £21500 of finance, taking the loan would lower my outstanding debt in general.

Originally Posted by ukbeemerboy

After 3 and a half years, you won't want to keep it. You'll want the next newer model which will make your current car look dated by comparison. Harsh, but true I'm afraid

Maybe be, but due to the balance being less on the loan that the settlement staying in the PCP. I could sell privately and go for a new car if that would be the case. Like I said this is not set in stone, wanted some advice from the knowledgeable guys on this forum.

[ukbeemerboy]

Originally Posted by CazuaLLUK

My current PCP does not show on my Experian report, nothing at all. It's not uncommon they said for this to be the case. Also regarding my current PCP it 'would' show £21500 of finance, taking the loan would lower my outstanding debt in general.


Maybe be, but due to the balance being less on the loan that the settlement staying in the PCP. I could sell privately and go for a new car if that would be the case. Like I said this is not set in stone, wanted some advice from the knowledgeable guys on this forum.

The benefit of the loan would be that the car would be finance free assuming it's a personal loan. PCP means the car is shown on finance which is a pain when selling really.

[CazuaLLUK]

Originally Posted by ukbeemerboy

The benefit of the loan would be that the car would be finance free assuming it's a personal loan. PCP means the car is shown on finance which is a pain when selling really.

The aim of the £16,500 loan would be to phone BMW financial services and pay the car settlement the very next day.

[Tengocity]

Sounds like a good plan to me, and I would do it in your situation. If you're going to for a mortgage next year then they'll ask for bank statements so will see the payment either way, so the loan will look like a lower liability I think.

[CazuaLLUK]

Originally Posted by Tengocity

Sounds like a good plan to me, and I would do it in your situation. If you're going to for a mortgage next year then they'll ask for bank statements so will see the payment either way, so the loan will look like a lower liability I think.

Exactly what I am thinking. It also shows once its done its done, Leaving the bubble they may think I will go and sign for another car again and be unsure.

Plus it saves on interest and money in general in the long term.

[335d Touring Xdrive]

Originally Posted by CazuaLLUK

So,

I have 42 months left of my PCP, £288 a month with a GFV of £9270.

Ever since adding new wheels to my car, modding it a bit I am really tempted to keep it. I love the car.

My Finance settlement is: £16,500. My total finance inc PCP/bubble etc is £21500 in total roughly.

I can take out a loan on 3.5% APR for £16,000 and clear my finance, leaving me £18,000'ish to pay on a loan. Doing it like this would save me £3500 in interest. And the loan monthly is roughly £300 so only £12 more than my PCP monthly.

Whats your guys thoughts on this? If I am 100% wanting to keep the car surely its best to do this asap to save on interest.

If it was me, i would take out the low rate finance if it is going to save you 3.5k in interest. Clear the outstanding finance on the car. This then frees up the car of outstanding finance, putting you in a better position to sell the car if you wish to do so later on, or earlier than you originally intended to.
Is this loan over the same period of time, that is still outstanding on the current finance?
If so, saving 3.5k in interest, did you really need to ask?

[CazuaLLUK]

Originally Posted by 335d Touring Xdrive

If it was me, i would take out the low rate finance if it is going to save you 3.5k in interest. Clear the outstanding finance on the car. This then frees up the car of outstanding finance, putting you in a better position to sell the car if you wish to do so later on, or earlier than you originally intended to.
Is this loan over the same period of time, that is still outstanding on the current finance?
If so, saving 3.5k in interest, did you really need to ask?

The loan is 5 years. so basically a year and a bit longer than my PCP but I am really really considering doing it. As I still make extra payments towards the loan too knowing the extra isn't also being eaten up in mega interest.

[335d Touring Xdrive]

I'd look at it like this if taking out a personal loan...

For...
Gives you a finance free car, and the flexibility to swap and change it when you want.

Against...
Adding approx 13 months more to pay off the car, if you keep it till the loan is cleared. Which i doubt you will, but the car will be much older and how many miles will be on it by then?

You may keep your cars a lot longer than most. I don't know.

Taking the above points above into consideration, me personally, i would take the personal loan out and save myself 3.5k.

[CazuaLLUK]

Originally Posted by 335d Touring Xdrive

I'd look at it like this if taking out a personal loan...

For...
Gives you a finance free car, and the flexibility to swap and change it when you want.

Against...
Adding approx 13 months more to pay off the car, if you keep it till the loan is cleared. Which i doubt you will, but the car will be much older and how many miles will be on it by then?

You may keep your cars a lot longer than most. I don't know.

Taking the above points above into consideration, me personally, i would take the personal loan out and save myself 3.5k.

Thanks for your help!

[teaston]

Nooo, just VT in a couple of years and get a G20!

[Tengocity]

Originally Posted by 335d Touring Xdrive

I'd look at it like this if taking out a personal loan...

For...
Gives you a finance free car, and the flexibility to swap and change it when you want.

Against...
Adding approx 13 months more to pay off the car, if you keep it till the loan is cleared. Which i doubt you will, but the car will be much older and how many miles will be on it by then?

You may keep your cars a lot longer than most. I don't know.

Taking the above points above into consideration, me personally, i would take the personal loan out and save myself 3.5k.

How is it adding 13 months to pay off the car? It's paying off the car v having a £9k balloon payment. The depreciation over that 13 months won't be much compared to the first few years too.

Never mind the cost of finance, in this situation the sensible thing to do is hold on to the car for a few years longer. Makes sense if it's bought and paid for and one is also perfectly happy with it.

Another 2 years and the next gen car will be out and that may be worth swapping in to, but I can't see that it's worth swapping for an LCI version for example, and being lumped with big monthly payments any time soon.

[335d Touring Xdrive]

There is approximately 47 months outstanding on the current finance. His proposed personal loan is over 5 years. = 13 months longer to pay off his current car if he keeps it till loan is payed off.

[teaston]

Originally Posted by 335d Touring Xdrive

There is approximately 47 months outstanding on the current finance. His proposed personal loan is over 5 years. = 13 months longer to pay off his current car if he keeps it till loan is payed off.

i.e. Until the H20 will soon be out!

[Tengocity]

Originally Posted by 335d Touring Xdrive

There is approximately 47 months outstanding on the current finance. His proposed personal loan is over 5 years. = 13 months longer to pay off his current car if he keeps it till loan is payed off.

Yes but in 47 months he won't own the car, he will still have £9700 or whatever to pay off, or in other words a small deposit for the next one if he's lucky. 13 months later with the loan he will own a car outright, so it's not even a vaguely like for like comparison.

[Bricktrix]

My mate did something similar when buying his Tesla. Had a huge chunk of cash, but still needed to finance 25k of the 85k he paid.
He took out 2 loans with Tesco (if I recall correctly) as once going above a certain amount, the apr went above 3%. He found this out by toying with their online calculator, found the cut off point and applied for 2 the same at the lower rate.
They rang him asking if it was a mistake, he said no, they said no problem. Job done.

If it was me personally, looking at your pcp figures, I'd be fine with keeping them as is. All low enough, even though your paying that interest. The GFV is low enough to turn into a loan at the end IF you feel you still want to.
A lot can change throughout years, especially if purchasing / moving house and priorities change even when you thought they never would. Your current pcp gives you some options and I dont think the outgoing amount is enough to concern a mortgage company to a point of refusal, unless your to the wire with incomings / outgoings. Not prying, just an observation based on whats presented.

If its any consolation, I've done pretty much the same thing. Got my car on the pcp deal to suit me, got a low GFV because wanted to own it at the end, purchased lots of ACS stuff, was happy with my plan.
Situations now completely changed, new house coming and looking at purchasing new car for 3x price of current one.
Never say never is all I would say

[MashinBenzin]

I'd say that it sounds like a wise thing to do - saving £3.5k is not to be sniffed at.

If you could stretch to it, I'd suggest upping the monthly payment on the loan to shorten the term (big if perhaps, but worth considering)

[CazuaLLUK]

Thanks for the posts guys. Yeah the PCP payment is good and low.

I have good cash flow at the moment so lifestyle costs etc is all fine and still saving for a house so yes I don't think a mortgage will be affected at all.

Lots to consider. Either way has its pros and cons.